Is leadership development worth the investment?
Original article posted on Chartered Accountants Ireland.
The apparent ineffectiveness of leadership development programmes is a key concern for organisations worldwide.
$50 billion is spent globally each year on leadership development according to a recent UK Corporate Research Forum (CRF) report entitled Leadership Development – Is It Fit for Purpose? This accounts for almost 40% of the $130 billion which Deloitte estimates is spent annually on global learning and development. US companies alone reportedly spend almost $14 billion annually on leadership development but despite this substantial investment in leadership development, the CRF’s and Deloitte’s latest Global Human Capital Trends reports highlight a growing gap in CEOs’ confidence in the ability of their organisational leadership to build organisations for the future.
Executive leadership programmes are therefore being challenged and re-evaluated, particularly in light of more cost-effective and transformative learning technologies now available to organisations. From a business perspective, the obvious questions are: why continue to invest in leadership development? And if we do, is it possible to ensure a return on this investment? At this juncture, it is important to note the difference between leader development, which is directed at an individual level, and leadership development, which is defined as “the expansion of the organisation’s capacity to enact the basic leadership tasks needed for collective work: setting direction, creating alignment, and maintaining commitment”. The philosophy of leadership at UCD Smurfit Executive Development is firmly on the latter, leadership development, based on the view that leadership is a contact sport and requires a more holistic focus.
However, the continued level of spend indicates that leadership development programmes remain a priority within organisations. Furthermore, participants’ satisfaction levels with their programmes demonstrate evidence of their positive impact, at least at the individual executive level. The 2017 Financial Times Corporate Learning Pulse Survey reported that 94% of senior executives indicated that undertaking such programmes had improved their business knowledge, competencies and confidence, while 85% acknowledged that the programmes had enhanced their ability to perform more effectively in their roles. So if executives report a positive impact from undertaking leadership programmes, why is this not being leveraged within organisations? If we are to ensure that investment in leadership development yields tangible results, a number of important factors must be addressed at the outset.
The re-entry phase is a significant determinant of enhanced performance
The re-entry phase relates to the first 12 months after completing a programme. It is the period when the executive is most likely to demonstrate enhanced performance in terms of actions performed in the executive’s role that result in achieving the organisation’s goals. While enhanced performance is not limited to this period, this re-entry phase is critical because it corresponds with the executive’s return to the organisation as a re-energised, more confident, self-assured individual seeking to make a meaningful contribution beyond her or his role. The likelihood of the executive achieving enhanced performance increases where there is alignment of vision, values and purpose between the executive, those in interconnecting roles, the wider organisation and the environment in which the organisation operates.
Successful re-entry is only partly determined by the executive
This is a common misgiving within organisations; particularly where the “fix it” mentality exists and very little regard is given to how the executive will be enabled on her or his return to apply their learnings. It is only common sense that the executive must be enabled to apply her or his learnings on return to the role they occupy. However, it is often the case that significant focus is placed at the outset on the decision to invest in a particular programme, but very little attention is given to how the organisation can support the executive’s return on completion of the programme. Equally, the environment in which the organisation operates plays a key role – particularly in the public sector and civil service – impacting emerging opportunities and, in ideal circumstances, supporting new directions being taken.
Alignment of motivations and expectations is crucial
Hidden motivations play a pivotal role in managing the expectations of executives when they complete the programme. This becomes challenging, for example, when the motivations for the programme were unclear at organisation level. Conflicting expectations also occur where little guidance is given to the executive before her or his completion of a programme. Some organisations, for example, have poor nomination and selection processes, creating resentment for those who are not selected and a sense of confusion for the selected executive who is unsure as to the basis for their selection. At times, organisations fail to communicate adequately during the onboarding phase of the programme – that is, the time in the lead-up to the commencement of the programme. A typical example of this is where an executive may be selected to undertake a leadership development programme as a high-potential employee. If the organisation has not thought clearly about the potential to promote this executive on her or his return, it can lead to immense frustration on the part of the executive and unfortunately, in some cases, a decision to exit the organisation.
Pre- and post-programme phases are inextricably linked
Successful return to the organisation cannot be disconnected from the pre-entry stage. Therefore, responsibility for this pre-entry stage rests largely with the organisation. The ways in which the programme is conceived, designed, developed and communicated, and the executive selection/nomination process are all key determinants of a successful re-entry phase.
Lack of organisational communication in the pre-programme phase with other people working closely with the executive can cause tension on the executive’s return. Where there was a lack of clarity on the executive selection process, feelings of neglect, being forgotten or excluded can emerge at peer level, making it difficult for the executive to be open about their experience. Therefore, the importance of fair process is essential and impacts the level at which the executive can share her or his learnings and insights with peers in particular.
Shared understanding of the organisation’s goals is key
It may appear obvious that developing leaders requires a change in the habitual way of doing things and putting new thinking into practice within organisations. However, the importance of the role of the organisation in this respect is sometimes underestimated. Where the organisation is culturally open to change and collectively embraces the value of learning, the executive is afforded opportunities beyond her or his role to play a transformative role within the wider organisation. Key to this is that the senior leadership team is invested in the learning opportunity provided by the leadership development programme. Those who work closely with the transformed executive are drawn positively to become part of what he or she aspires to achieve within the organisation’s mission.
Positive transformation naturally leads to the search for new purpose
Leadership development programmes play an important role in the transformation process. The transformed executive emerges with an enthusiasm to share her or his learnings in seeking new purpose and meaning beyond themselves. The point at which this opportunity is not provided coincides with frustration on the part of the executive, whose natural inclination is to feel trapped with the desire to become unstuck. This inevitably results in the executive questioning her or his future, which is detrimental to retention of talent.
Organisations must be mindful of several factors before embarking on a leadership development process. The programme’s starting and end points should not coincide with the actual programme schedule itself; rather, from the design phase right through to facilitating the executive’s return to the organisation and enabling the application of her or his learnings within their teams and the wider structure.
Organisations need to understand that the returning executive will have new expectations of what he or she can achieve at a wider organisation level. These expectations have the capacity to play a transformative role within the organisation if the decision-makers are open and have considered this in advance as part of the programme planning.
Helen Brophy is a Director at UCD Smurfit Executive Development.